CIIN Certificate CF7 flashcards
CIIN Certificate CF7 · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Insurable interest
- A legal right or relationship such that the policyholder benefits from the subject's survival or suffers loss from its destruction; required at inception for life policies and at loss for indemnity covers.
- Utmost good faith
- The duty on both insurer and insured to disclose all material facts relevant to the risk; breach by non-disclosure or misrepresentation makes the contract voidable.
- Indemnity principle
- The insured is restored to the pre-loss financial position, never better off; applies to property and liability, not to life or personal accident benefit policies.
- Subrogation
- After paying an indemnity claim, the insurer acquires the insured's rights to recover from the negligent third party, limited to the amount paid.
- Proximate cause
- The dominant and effective cause of a loss; it determines whether the peril is covered, and remote causes are disregarded in claims assessment.
- Term assurance
- Life cover that pays the sum assured only if death occurs within the policy term; there is no maturity value, making it the lowest-cost life product.
- Endowment policy
- A life policy paying the sum assured on death within the term or on survival to maturity, combining protection with a savings element.
- Annuity
- A contract converting a capital sum into periodic income; an immediate annuity starts payments at once, a deferred annuity at a future date.
- Surrender value
- The cash value payable when a savings-type life policy is terminated early; it is usually lower than total premiums paid in the early years.
- Average clause
- Where the sum insured is below the value at risk, the insurer pays (sum insured divided by value at risk) multiplied by the loss, not the full loss.
- Motor third-party liability
- Compulsory cover for injury or damage caused to third parties by the insured vehicle; comprehensive cover adds own-damage, fire, and theft.
- Institute Cargo Clauses
- Standard marine cargo terms A, B, and C giving diminishing cover; A is all-risks, while C covers only the narrowest list of named perils.
- Professional indemnity
- Liability cover for errors, negligence, or omissions in professional services, protecting the professional against third-party claims for financial loss.
- NAICOM
- The National Insurance Commission, Nigeria's primary insurance regulator; it licenses insurers, brokers, and agents and sets capital and solvency requirements.
- Broker versus agent
- A broker acts for the insured when placing cover; an agent acts for the insurer; both must hold current NAICOM licences to intermediate.
- Policy schedule
- The part of the policy document identifying the insured, the sum insured, the period of cover, and the perils covered under the contract.
- Earned premium
- The portion of premium attributable to the expired period of cover; the unearned premium is the reserve held for the unexpired term.
- Combined ratio
- Loss ratio plus expense ratio; a combined ratio below 100 percent indicates an underwriting profit, while above 100 percent indicates an underwriting loss.
- IBNR reserve
- Incurred but not reported reserve: an estimate for claims that have occurred but have not yet been notified to the insurer at the reporting date.
- Solvency margin
- The excess of admissible assets over liabilities; regulators set minimum capital and solvency thresholds that insurers must maintain at all times.
- Marketing mix
- For insurance, the mix covers product, price (premium), place (distribution channel), promotion, people, and process used to reach target customers.
- Treating Customers Fairly
- An outcomes-based approach ensuring products meet customer needs, information is clear, and no post-sale barriers prevent fair claim outcomes.
- Treating customers fairly
- An outcomes-based approach ensuring products meet customer needs, information is clear, and no post-sale barriers prevent fair claim outcomes.
- Moral hazard
- Behaviour change after cover is bought, such as carelessness; insurers counter it with deductibles, exclusions, and claims investigation.
- Adverse selection
- The tendency for higher-risk individuals to buy more cover; underwriting, risk classification, and pricing mitigate its effect on the pool.
- Group life policy
- A master life policy covering a group of employees, usually paid for by the employer, with benefits based on salary or a fixed multiple.
- Universal life policy
- A life policy with flexible premiums and an adjustable death benefit, where the cash value earns interest and expenses are charged explicitly.
- Business interruption cover
- Property-related cover for loss of profit and increased working costs following an insured physical loss that interrupts the business.
- Claims-made policy
- A liability policy covering claims reported during the policy period regardless of when the incident occurred, provided the retroactive date is respected.
- Loss ratio
- Incurred claims divided by earned premium; it measures claims cost relative to premium income and forms part of the combined ratio.
- Reinsurance
- A contract in which an insurer transfers part of its risk to another insurer; it is not a contract with the original insured.
- Complaints handling
- The process of acknowledging, investigating, and resolving customer complaints within stated timelines, with escalation to the regulator or ombudsman if unresolved.